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Over 1.1 billion people currently live in informal settlements, a number expected to rise by two billion in the next three decades, significantly increasing their vulnerability to climate-related hazards like floods and heatwaves. These communities often lack proper integration into urban planning and disaster management, leading to severe losses in housing, health, and financial stability, which can cascade into further challenges. The concept of "loss and damage," first introduced in 2007, highlights the adverse effects of climate change that cannot be mitigated or adapted to. As such, robust policies are needed to support these vulnerable populations, particularly through integrating local actions with formal governance structures. This study examines the impact of climate-related losses in informal settlements in São Paulo, Jakarta, and Nairobi, emphasising the need for transformative approaches that engage residents as change agents while enhancing existing social protection and community involvement in funding.